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Tom Lee: Bitcoin Close to Full-Blown FOMO as Price Nears Key 10K Level
Tom Lee: Bitcoin Close to Full-Blown FOMO as Price Nears Key 10K Level
By CCN: After a week in which bitcoin flirted with $9,000 for the first time in a year, Fundstrat’s Tom Lee cited data which suggests the point of no return is fast approaching.
According to data from Fundstrat, when the value of bitcoin crosses the $10,000 barrier, it’s full-blown FOMO all the way. Labeled as ‘Level 10’ FOMO, this represents the equivalent value at which Bitcoin has soared in the past.
Full Blown ‘Level 10’ FOMO Approaching for Bitcoin
Global head of the Financial Times, Adam Samson tweeted the following graphic on Wednesday, along with this tweet:
According to Fundstrat, the real FOMO will begin once Bitcoin crosses the $10,000 barrier.
Tom Lee then made an appearance in the thread to cool Samson’s eagerness, but essentially confirmed the conclusions drawn from the data. Lee wrote:
“Actually the point of the chart is to say “real FOMO” probably starts when bitcoin exceeds $10,000, as that is a price level only seen 3% of all days… …Mathematically equivalent to exceeding $BTC $4,500 in 2017. Looking back, that price was a level that indeed triggered FOMO.”
Glancing at the Bitcoin charts from late 2017, we see that $10,000 was a clear turning point. However, Lee’s price-focused data fails to take fundamental factors into account.
Two weeks in December 2017. | Source: CoinMarketCap
In early December 2017, the launch of CME Group’s bitcoin futures market was announced. A couple of weeks later, when the futures market actually opened, the value of bitcoin plummeted to depths from which it has yet to recover. Read this prescient Bitcointalk forum thread to get a sense of the uncertainty surrounding CME’s impact at the time.
Quibbling Over Numbers
If more data like that of Fundtrat’s appears in the near future, the full-blown FOMO mentioned by Tom Lee could become a self-fulfilling prophecy.
That said, not everyone agrees with Lee’s numbers. One Twitter user questioned the wisdom of assuming $10,000 was the FOMO level in 2017. After all, the value of bitcoin did soar from $1,000 to $3,000 between January 2017 and June 2017 before continuing to notch up new all-time highs. User @John_Silvestro tweeted:
“Exceeding 4500 in 2017 was an ATH. As was anything above 1100 during 2017. Comparing them retroactively with a 3% metric is false equivalency. The real comparison for 4500 in 2017 would be btc @ ~77,000 today.”
Others agreed with Silvestro’s skeptical take, including @_Dumb_Genius, who wrote:
“Why wouldn’t Level 10 FOMO for this cycle be around $80K (4x the top of the previous cycle) similar to $4500 (4x of ~$1100)? Is Level 10 FOMO being front run by a factor of 8x? And if that’s the case, will the bubble top percentage of this cycle then be significantly higher?”
Media Boom and Hype?
Echoing the idea of bitcoin growth predictions becoming a self-fulfilling prophecy, another Twitter user suggested that regardless of technicalities, $10,000 could be the point where media hype aligns with buying pressure. User @Bitcoin_Brian said:
“$10k could lead to media boom and hype cycle. That is where I would expect to see the FOMO. Right now looks like HODLers accumulating.”
Tom Lee has been a prime mover in that boom and hype before and maintained his 2018 BTC price prediction of $25,000 for some time. On that occasion, his hype proved illusory; but with bitcoin now back to a 12-month high, he could have an opportunity to redeem himself.
Study: Publicly Listed Chinese Firms Quietly Participate in Bitcoin Mining
According to regional reports, a few publicly listed Chinese companies have been secretly mining bitcoin by pretending to provide cloud or web hosting services. Moreover, recent studies have revealed a growing trend of mystery miners processing the BCH and BTC networks at the same time as these firms have been running undercover mining operations in China.
Publicly Listed Companies in China Have Undercover Bitcoin Mining Operations
On May 29, Chinese crypto publication 8btc reporter, Lylian Teng, published a two-part study on a few publicly listed Chinese firms that have been secretly mining bitcoin. The first report came out on April 19 which discussed a construction company that suddenly started mining coins. Huatie Hengan is a subsidiary of publicly listed company Huatie and when investors discovered that the business was mining it caused an investigation from regulators. 8btc detailed that Huatie lost over $23 million during its tenure secretly mining bitcoin under the guise of a cloud computing operation. Additionally, the analyst discovered more publicly listed companies allegedly participating in the mining industry under the veil of secrecy.
In another instance, Wholeasy, a Chinese firm that operates as an internet game brand company in China and internationally has also been allegedly mining coins. The Chinese publication claims that Wholeasy contributed 17.7% of Ebang’s miner sales in 2018. Wholeasy also operates the PC media resources startup Mobcolor, a mobile digital advertising platform. In August 2018, the two firms announced that Mobcolor would “construct mining center for digital cloud computing.” 3G Venture would offer Mobcolor “90MW of power capacity at $0.055/kWh.” Moreover, the reports state that Mobcolor rented 65,000 Ebang mining rigs to another firm called VDIT. Mobcolor advertises support for crypto on its Twitter page whose header photo reads “Go farther with bitcoin.”
Besides Wholeasy, another Chinese operation called RHY has been purportedly building mining farms in places like Iran. A miner named Ma Jingguo told the regional news outlet that RHY is a NEEQ-listed public company in China. RHY does not hide the fact that it participates in blockchain mining and claims to power a 450MW facility with 300,000 miners. According to the miner Ma Jingguo, a great number of RHY mines are located in Iran and the firm was the first operation to invoke the #MininginIran hashtag on social media. In addition to Chinese miners migrating to Iran for extremely affordable electric prices at $0.006 per kilowatt-hour, many also flocked to Sichuan for cheap electricity during the wet season.
The news also follows the recent discussion by bureaucrats who have talked about banning bitcoin mining in China. On April 9, China’s state planner from the National Development and Reform Commission (NDRC) revealed he wanted to eliminate mining activity within the country. Reports claim that the NDRC said “[Bitcoin miners] should be phased out as they do not adhere to relevant laws and regulations, are unsafe, waste resources and pollute the environment.” The publicly listed firms participating in so-called secret mining operations have also occurred coincidently around the time when mystery miners have made up a good portion of the Bitcoin Cash (BCH) and Bitcoin Core (BTC) networks.
During the first month of 2019, blockchain observers noticed a growing trend of unknown miners processing blocks on these networks not seen since the early days. On Jan. 28, mystery miners accounted for more than 22% of the BTC chain’s hashrate and 17% of the hashrate on the BCH chain. Today those figures are lower, but unknown miners still account for 9.7% of the BTC network hash and 13.9% of the BCH hashrate. The mining industry that concentrates on the SHA-256 algorithm has also seen significant growth over the last few months and hashrate has increased on both networks as BCH and BTC values have spiked considerably. Even though crypto prices are high when Huatie Hengan reportedly dropped its construction efforts to quietly mine cryptocurrencies, 8btc’s research estimates the startup lost more than 90% of its net value in less than a year.
What do you think about the publicly listed Chinese companies secretly mining bitcoin? Let us know what you think about this subject in the comments section below.
Image credits: Shutterstock, RHY, Mobcolor Twitter account, Pixabay, and Coinmetrics.io.
Associated Press Rules ‘Crypto’ Isn’t a Substitute for ‘Cryptocurrency’
The AP Stylebook, a venerable handbook for journalists, academics and other writers, has issued a guideline that should make the infosec community happy – if not cryptocurrency enthusiasts.
In short, don’t call digital money “crypto.”
The six-letter word was traditionally associated with cryptography, but in recent years has been used to refer to bitcoin and the plethora of copycats and competitors that followed it, to the chagrin of many security specialists.
A type of digital money that uses encryption technology to make it secure. Avoid using the shorthand crypto, which can be confused with cryptography. Cryptocurrency is not the same as virtual currency, which is used in virtual worlds such as online games. [Emphasis added.]
Image via AP Stylebook
The Stylebook even offered a bit of commentary on the best uses for cryptocurrencies:
Although it’s possible to trace bitcoins and some other cryptocurrencies as they are spent, owners of accounts behind the transactions aren’t necessarily known. For this reason, cryptocurrency is a favored form of payments among criminals, including those behind ransomware, in which malicious software locks a computer and its data until a ransom is paid.
AP Style tip: Bitcoin is a digital currency. As a concept, Bitcoin is capitalized. The currency unit, bitcoin, is lowercase.
Dems’ Mueller-Infused Impeachment Cry Roils the Stock Market
By CCN: A surprise statement and resignation from special counsel Robert Mueller did little to help the wobbling stock market on Wednesday. The Dow briefly fell beneath 25,000 before rallying to back to 25,126, down 221 points for the day. Meanwhile, the Nasdaq closed down 0.79%. Mueller made it clear he did not exonerate the President but had no valid court to try him in. This appeared to be another trigger for stock declines alongside the bond yield sell-off,
Political instability looks inevitable as Democratic candidate hopefuls continue to cry impeachment.
What Robert Mueller basically did was return an impeachment referral. Now it is up to Congress to hold this president accountable.
We need to start impeachment proceedings. It’s our constitutional obligation.
Dem President Likely Viewed as a Stock Market Negative
There is splintering in the party as Speaker Nancy Pelosi believes it is precisely the wrong approach. Trump appears to almost relish the prospect of supercharging his voter base. Stock markets are concerned with Mueller because anything that hurts Trump’s chances of reelection would likely increase the probability of a more left-wing government. More regulation and higher taxes would be a real threat to the free-money buyback-pumped Dow, S&P 500, and Nasdaq.
Constitutional Crises Historically Negative for Dow and S&P 500
So if impeachment proceedings are possible, what does this mean for stocks? If we review history, we can see that Richard Nixon’s Watergate scandal caused a 14% loss over one month in the S&P 500. Stocks were in a massive slide during this period, so perhaps this is not the best example. The only link here is if you take Mueller’s resignation as a similar protest to Attorney General Richard’s Watergate resignation.
S&P 500 Rallied Hard After Clinton Impeachment
Bill Clinton would be a much better case, mainly as Trump is unlikely to be removed from office and presides over a strong economy. While stocks slumped in the run-up to Clinton’s eventual impeachment, they soon rallied after seeing no real risks to the economy.
Trump’s Reelection Odds Steady
The betting odds for Trump’s reelection are still holding steady despite this morning’s events. Despite the trader war shenanigans, the U.S. president is still on balance seen as a market-friendly president. Joe Biden is likely the stock market’s preferred Dem candidate, and it is relevant that Bernie Sanders’ odds have been drifting lately.
Dow Jones Drifts Briefly Below 25,000
For those using psychological levels in their trading, it is worth noting the Dow’s dip beneath 25,000. It will be interesting to see if this new weekly breakout follows through to the downside.
Dow started sliding at 11:10am ET, right as Mueller presser ended. No idea if the two are related, but timing is certainly…interesting. pic.twitter.com/Pm0oAXCawf
Global growth concerns are the main focus of most investors, with China potentially banning Apple products currently a big worry. An alternate perspective is emerging that Trump’s tariffs might create sizeable damage to the domestic economy after all. The confirmation of this development would likely be the stock market rising in response to increasing impeachment odds or falling reelection odds for Trump.
Bitcoin SV Re-Listed on Binance? Chinese Fake News Kindles 67% Pump
By CCN: Bitcoin SV (BSV) gained 67% in value in just a few hours on Wednesday, coinciding with the spread of fake news regarding its imminent re-listing on Binance.
Chinese investors may have been hit hard after a doctored WeChat screenshot was circulated around the country’s “crypto media.” That’s according to VC and analyst, Dovey Wan, who spotted the fake post and offered a translation of its doctored content.
Bitcoin SV: Back on Binance; CZ Confirms Craig Wright as Satoshi?
Seems someone did it purposely just around the same time BSV pumped just an hour ago.
“CSW transferred 50k BTC from the biggest BTC wallet to Binance, which confirmed he is the real Satoshi. As such CZ will re-list BSV and make an official apology on Twitter.”
That apology, and re-listing, never came. Wan revealed a tendency for FOMO among Chinese retail investors, who she said display a herd mentality. Wan, a founding partner at Primitive Ventures, continued:
“I don’t know how much this contribute to the pump, but this fake news snapshot went viral in many Chinese retail groups around the same time and folks (thought it was real) got super excited about it. CHINESE RETAIL IS THE BEST HERD EVER.”
Binance CEO Changpeng Zhao (CZ) went through the formality of confirming the news as fake. CZ tweeted:
“Careful, it’s caused by fake new circulation in China. I got pinged 20 times today, clarifying it is fake.”
In light of Wan’s comments regarding investor mentality in the far east, perhaps this explains Bitcoin SV’s readiness to pump of late. Just over a week ago the BSV price spiked by over 125%, coinciding with Craig Wright’s registration of the Bitcoin trademark. Another example of badly informed Chinese investors?
Rise in the East, Set in the West
Binance CEO Changpeng Zhao warned investors not to believe the fake news about Bitcoin SV. | Source: REUTERS/Darrin Zammit Lupi
Wan claimed this is standard operating procedure for scammers in China, who take advantage of lax media practices. Wan wrote:
“The trick is easy and constantly used by many scams – all chinese crypto media circulate the breaking news via picture as above in wechat, instead of news link. So anybody can just use the same theme template and photoshop one like above.”
Craig Wright also went on about the subject of scams this week. Writing in a recent blog post, Wright continued to foretell the end of cryptocurrency as we know it. Speaking of banking scams and economic malfeasance, Wright wrote:
“The same still goes on today, and worse, it is the foundation for schemes like Tether, ICOs, and the bucket shops people call exchanges. All of them will end. Such is my vision. Such is the Satoshi Vision.”
Someone obviously had an interest in pumping Bitcoin SV’s price on Wednesday. With Craig Wright’s first public appearance (since the notorious trademark registration) at the CoinGeek Toronto conference just hours away, what better time for BSV to top the crypto charts?
Bitcoin SV Price (BSV/USD) Targets $200
From the daily low of $114.70, the value of BSV soared over the course of a few hours, peaking at $192.33 by Wednesday afternoon. That’s a 67% increase, and it immediately inserted BSV as a top-eight cryptocurrency by market cap.
The Bitcoin SV price surged as much as 67% on Wednesday. | Source: CoinMarketCap
After a pullback to the $180 range, BSV remains ahead of Tether (USDT), Stellar (XLM), and Cardano (ADA). CoinMarketCap reports the second highest daily volume in BSV’s history at $1.1 billion. That sum has been bettered just once – last week when Wright announced his “successful” registration of the Bitcoin trademark.
Disclaimer: This article is intended for informational purposes only and should not be taken as investment advice.
‘Free Bitcoin’ Scam Propagated on YouTube Steals Crypto via Clipboard Hijacking
A trojan is being propagated on YouTube via fraudulent videos about an allegedly free bitcoin generator which attempts to steal crypto and personal data.
The Qulab information-stealing and clipboard hijacker trojan is being propagated on YouTube via fraudulent videos about an allegedly free bitcoin (BTC) generator, BleepingComputer reports on May 29.
According to the report, security researcher Frost reached out to BleepingComputer about the trojan scam, saying that YouTube would take down the fraudulent videos when reported, but new accounts and videos would subsequently pop up with the same MO.
The videos reportedly describe a tool that lets users earn free bitcoin, with a link in the video description. The links then direct to a download for the alleged tool, which is the Qulab trojan. After downloading, the trojan actually needs to be installed in order for it to be deployed.
In addition to attempting to steal a plethora of user information, the Qulab trojan will also reportedly attempt to sneakily steal cryptocurrency for the bad actor by scanning for strings copied to the Windows clipboard which the program recognizes as crypto addresses, and then substituting in the attacker’s address instead.
If a user pastes that string into a website field to specify where their funds are spent, they will paste in the attacker’s string instead and direct the funds there.
The warning indicates that this is a viable strategy, since users are reportedly unlikely to remember or visually register that their intended crypto address — a long string of characters — has been swapped out for a different one.
As previously reported by Cointelegraph, YouTube purportedly advertised malware disguised as an advertisement for bitcoin walletElectrum in March. Reddit user mrsxeplatypus described the scam, predicated on URL hijacking, as follows:
“The malicious advertisement is disguised to look like a real Electrum advertisement […] It even tells you to go to the correct link (electrum.org) in the video but when you click on the advertisement it immediately starts downloading the malicious EXE file. As you can see in the image, the URL it sent me to is elecktrum.org, not electrum.org.”
Egypt Lifts Ban, Will Allow Licensed Cryptocurrency Companies
Egypt appears to be loosening its restrictions on cryptocurrency.
A source speaking to the Middle East News Agency described a proposed bill to ban the creation, trading, or promotion of cryptocurrencies without a license. Previously Egypt banned all cryptocurrency under Islamic law.
Shawki Allam, the current Grand Mufti of Egypt, issued that ban in early 2018, stating the technology could undermine the legal system via tax evasion, money laundering, and other fraudulent activities. The Grand Mufti was also concerned with crypto’s volatility and scams.
The bill, according to the Egypt Independent, would give the board of directors of the Central Bank of Egypt (CBE) the right to regulate cryptocurrencies and require, multiple potentially expensive licenses to do business.
The report reads:
The new law provides legal authority for the electronic authentication of bank transactions, electronic payment orders, and transfer orders as well as for the electronic settlement of checks and the issuance and circulation of electronic checks and electronic discount orders, provided that Board of Directors of CBE issue rules and procedures regulating all the aforementioned actions.
50% Stock Surge Will Launch Amazon to a $1.3 Trillion Valuation: Analyst
By CCN: Billionaire Jeff Bezos should buckle up because Amazon stock will surge 50% over the next year to top $2,750 a share. That’s the bold prediction of Michael Levine, a senior analyst with New York equity-research firm Pivotal Research Group.
Analyst: Amazon’s Valuation Will Soar to $1.35 Trillion
Levine’s bullish Amazon price target is well above the second-highest forecast of $2,500 by Cowen, according to Tip Ranks.
Using Levine’s projection, that means Amazon — which is currently valued at about $893 billion — could rocket to $1.35 trillion by 2020.
Wall Street analysts have set a bullish near-term price target for Amazon stock. | Source: Tip Ranks
‘A Must-Own Name With Huge Upside Potential’
Amazon stock will soar because it has “the highest-quality management and franchise within global internet,” Levine wrote in an investor note. Accordingly, it is “a must-own name with huge upside even from here.”
Moreover, Levine says Amazon’s move toward one-day shipping is a major catalyst that’s propelling it to “owning the consumer’s wallet.” Levine says even in spite of Amazon stock’s recent slowdown, it’s still set to explode in the near term.
“Despite deceleration, AMZN remains the most open-ended story in large-cap tech.”
Levine is also bullish about Amazon Web Services’ cloud business, which he claims “will surprise” investors with its meteoric growth.
Amazon stock has been down in May, but it’s up over the past six months. And analysts say that’s due to CEO Jeff Bezos. | Source: Yahoo Finance
Warren Buffett: Amazon Surpassed My Expectations
Michael Levine’s exuberant outlook echoes the unbridled optimism expressed by billionaire investor Warren Buffett. In early-May, Buffett revealed that he now owns Amazon stock and was “an idiot” for not investing in the e-commerce giant sooner.
As CCN reported, Buffett said he regretted underestimating Jeff Bezos and his relentless will to win.
“I’ve been an idiot for not buying [Amazon stock sooner].”
Jim Cramer: Jeff Bezos Is Relentless
In 2018, Buffett gushed that Amazon had exceeded his wildest expectations, and said he regretted dismissing it for so long.
“It’s far surpassed anything I would have dreamt could have been done. I had no idea that it had the potential. I blew it!”
If Amazon stock is soaring and its dominance continues to mushroom, it’s because its relentlessly ambitious CEO, Jeff Bezos, takes a ruthless approach to annihilate his competitors.
In April 2019, Amazon’s Whole Foods subsidiary launched a scorched-earth price war to decimate rival Walmart, which has a successful grocery-shopping business.
To this end, Amazon slashed prices on 500 grocery items at Whole Foods to chip away at Walmart’s market share. That was the third round of price cuts the specialty grocer instituted since being acquired by Amazon in 2017.
CNBC commentator Jim Cramer, who owns Amazon stock, says Jeff Bezos will stop at nothing to nuke his foes.
“They hate, hate, hate Walmart! Walmart is the biggest grocery chain in the country. Amazon will stop at nothing to take away the [market] share that Walmart has gained.”
Bitbond Plans to Raise $3.9 Million in Germany’s ‘First’ Regulated STO
Blockchain-based lending platform Bitbond is launching a security token offering (STO) that it says is the first to be approved by a regulator in Germany.
Through the sale, the firm aims to raise €3.5 million ($3.9 million), allowing it to continue providing loans to small businesses, Germany-based Bitbond announced Tuesday. The STO is open until July 8 for investors everywhere except the U.S. and Canada.
The security token, called BB1, works like a bond, and Bitbond will buy back the tokens after 10 years. The prospectus of the STO has been approved by German financial regulator BaFin, the firm said.
Bitbond provides working capital loans to small businesses that use e-commerce platforms like eBay and Amazon in Asia, and claims to have already processed over $15 million-worth of business loans.
Radoslav Albrecht, Bitbond founder and CEO, said:
“Small businesses are an incredibly important part of the economy, and hire the majority of all employed people worldwide. We see this STO as a way to help small businesses create more jobs, and supercharge their own growth.”
Founded in 2013, Bitbond has already raised millions in VC funding to support its loan offerings. Its latest round attracted $5.5 million, and it previously raised $1.2 million,$671,000 and $.2.2 million in three separate funding rounds.
Bitcoin (BTC) Needs To Revisit $3,000 By October, Bearish Analyst Notes
Bitcoin Overextended, Needs Correction
No matter how the Bitcoin (BTC) price acts, bearish analysts always make their voices heard. Once the crypto asset exploded above $8,400 on Sunday, pushing to a smidgen shy of $9,000, these somewhat cynical traders have come out of the woodwork to suggest that the party for Bitcoin may soon end.
In a recent analysis posted on Trading View, analyst Magic Poop Cannon, who purportedly called November and December’s downturn, suggested that Bitcoin’s recent move to $8,000 and beyond is still a part of a large “bear market rally.” He suggests that BTC may soon roll over, returning to a state where bears have control of the wheel, adding that this move may be “violent”.
The reason why he believes so is that Bitcoin has yet to touch the bottom band of a rising logarithmic arc that he depicted, which BTC has always touched to kick off its next bull rally. Per his calculations, BTC could touch that arc by October, and at a price of $3,000. He notes that this will fulfill Bitcoin’s seeming requirement to touch the bottom and the top of the arc in each cycle, and would also “fulfill the linear nature of Bitcoin.”
He goes on to point out that the Network Value to Transactions ratio (NVT) is at the “biggest pending sell signal” that is has ever had. Magic writes that once the NVT begins to head lower out of “overbought” territory, there will be “absolute carnage that catches the crypto markets completely off guard.”
This is far from the first time in 2019 that Magic has been cynical of moves higher. Case in point, the analyst last week noted that strong, correlated increases in the Money Flow Index (MFI) and Network Value to Transaction ratio (NVT) on the weekly chart have always preceded drops in the BTC price. In 2011, when the two indicators reached the peak of their range (like we see now), a 93% correction ensued. In 2013, the two indicators hit overbought/overvalued ranges twice, which were followed by a 75% and 85% decline, respectively.
$3,000 May Be Out Of Reach For BTC
Some have been a bit less cynical, calling for a correction to seemingly more resonable levels. Bravado’s Lead Analyst, Bitcoin Jack, recently pointed out that BTC has enough fuel for one more leg higher, expected to peak at $9,800. From there, he expects for BTC to enter a “corrective pattern”, which will see the cryptocurrency potential move to correct $6,400. This isn’t as dramatic as Magic’s expected move to $3,000, but still somewhat harrowing nonetheless.
The thing is, a move to $3,000 would totally revert Bitcoin’s current bull rally. Per previous reports from this outlet, the three-day Super Guppy, which last flipped from red to green when Bitcoin began its rally from $300 to $20,000, has finally turned green in this cycle. If BTC was to revisit $3,000, setting a new low for this cycle, all historical precedents would be deemed moot, catching traders off guard. Of course, there’s still a chance that the large correction Magic expects could hit the market, but many other traders aren’t really betting on it.
The crypto world is definitely not for everyone, especially not for the faint of heart. Not only is the whole crypto sphere surrounded in a sort of techy allure (meaning that you have to be a tech-inclined person to fully comprehend the concepts and underlying technologies used), but it’s also arguably one of the most unpredictable ecosystems in the world.
That said, we’ve all heard stories of how various people “made it big” in crypto. We’re not talking about brilliant people such as Vitalik Buterin who invented Ethereum, and also happens to own a sizable amount of ETH (which he will not give away for free, mind you).
The Internet is filled with incredible stories of people who more or less randomly invested in new crypto projects, and became millionaires in a couple of months or years. As it turns out, long- term trading can be a very efficient way of making money. As stress-free as this method might be (it’s really not), it’s not for everyone.
Those who don’t believe in long-term trading are the ones who are often going for short-term trading and are called day traders. So, what is day trading? How can you get into day trading? Is it worth it? What are the risks? In this guide, we will look try to provide you with comprehensive answers to all these questions, and possibly others as well.
What exactly is day trading?
Trading means buying and selling things with the aim of making a profit. Real-world examples of trading can involve anything like stocks, shares, currencies, and even metals. In trading, the golden rule is the following: Buy an asset at a given price and then sell it for more than you paid for it! That’s how you make a profit.
In the crypto world, the trading goals fall into two categories mentioned above: short-term trading and long-term trading. Day trading is the “epitome” of short-term trading. To put it as simple as possible, it involves holding a crypto asset for anywhere from a couple of seconds, to a maximum of a couple of hours. The concept is to buy an asset and sell it by the end of the day hoping to make a small, but very fast profit.
When it comes to day trading, one has to have in-depth knowledge of how the crypto and the financial world works. Not only that, you have to constantly be on the lookout for good opportunities that can wield a quick profit.
Methods used for day trading
Right from the bat, it’s worth noting that there no fool-proof method of day trading, as the method itself is a very risky one. However, the main two methods that people use today trade are by using chart analysis or by speculating.
Speculating involves a trade believing that the price will go up or down because of certain events. A good example of this is as follows: a trader sees a positive news story on a renowned website. As a cryptocurrency’s price can be affected by these types of news events, the trader decides to risk and speculates that the price will rise.
Alternatively, you can practice day trading cryptocurrency by using chart analysis. Of course, it’s a much more complex method, as it requires you to study the price movement of a particular crypto asset. The main goal is to try to guess which way the price will go based on a lot of historical price movements and other similar data.
How about the risks?
Cryptocurrency trading, in general, is a very risky business. Some call it “a high-risk, high- reward” type of situation, and they are not wrong. For starters, it’s important to understand that crypto trading is not like trading real-world assets. There is a lot of volatility in the market. The prices of cryptocurrencies are extremely volatile. It’s not uncommon for the price of a coin to rise and fall by more than 50% in a single day.
Since day trading requires you to be on a constant alert, it might become harmful for your state of mind (or piece of mind, or even mental health) in the long run. You may get over-exhausted and frustrated. Since cryptocurrencies allow you to be your own bank, so to speak, you are the one responsible for the security of your funds. In the crypto world, a small mistake like misspelling a character for a wallet address could mean the total loss of your funds. Not only that, but you’ll have to work with cryptocurrency exchanges if you are to become a serious day trader. As we all know, the crypto sphere has seen a lot of hacks and attacks on crypto exchanges.
Basic tips for crypto day trading
The first thing you need to understand is that there’s a very very small chance you will be a successful crypto day trader right off the bat. Crypto day trading requires patience, time, and commitment.
There will be days when you will lose. Learn to accept these losses, and try to learn as much as possible from them. Even the most successful traders lose sometimes. It’s impossible to have a 100% prediction rate.
The difference between a seasoned trader a newbie one is his state of mind. Where a newbie would try to “chase” his losses, a seasoned trader will take a break, take a walk, read a book, and put everything on hold. Remember: if you experience a bad loss, the worst thing you can do is attempt to make it back by taking a big risk.
It takes a lot of time before you will understand how the market works. Hence, you can read as many books or tutorials online in order to get a better understanding. Using a demo simulator for crypto trading is a very good idea. This will eventually prepare you for real-world losses, but it will also help you develop a strong mindset.
Goals are very important in life and just as important in day trading. Don’t forget that day trading is all about small and quick gains. If you get 1% of the trade, that’s very good. It’s a very good practice to never risk more than 1% of your total bankroll in day trading.
Most modern crypto exchanges have a lot of advanced features that can really help you in your day trading endeavors. You can learn to use something called a “limit sell order.” This allows for traders to be automatically processed when you coin hits a certain higher (or lower) price.
While we are on the subject, make sure that you find a reliable crypto exchange, one with very good liquidity, lots of trading pairs, and positive sentiment from the crypto community at large.
Coming back to our initial point, crypto day trading is definitely not for anyone. In fact, without the proper knowledge, it’s probably one of the riskiest methods of making money from crypto trading. Be that as it may, it can be a very exciting process, one that could “make or break” a trader.
And, while there is no perfect method of succeeding in crypto day trading, we will only remind you two very important rules that should also be YOUR rules: never invest more than you can afford to lose and never chase your losses.
Determine Which Coins Can Bring You Profit With RSI Hunter
Crypto markets, regardless of their bearish or bullish incline, offer plenty of opportunities to profit from trading. To take advantage of them, you need access to reliable market data and useful indicators.RSI Hunter is a platform that can help you to identify coins that have potential for growth based on their current market positions.
The RSI Hunter website lists hundreds of cryptocurrencies and tokens classifying them as oversold, neutral or overbought. Its analysis is based on data pulled from leading digital asset exchanges like Binance, Okex, Bittrex, and others. It also uses several base currencies such as BTC, BNB and USDT to produce comparable results.
Besides choosing a trading platform and a base currency, you can set different timeframes as well – from one minute to one week. RSI Hunter will then offer you examples in all three mentioned categories. The price of each crypto is shown both in U.S. dollars and the respective base currency, along with weekly and monthly highs and lows. Prices and relative strength indexes are updated every minute.
The tables contain a number of relevant indicators including moving average, standard deviation and average volume for various time periods. RSI Hunter supplies you with charts as well, which show the 14-day percentage change in the prices of the coins and tokens. A pivot point is estimated for each cryptocurrency.
To stay in touch with major crypto markets at all times, you can also use Bitcoin Markets. The tool has been developed by Bitcoin.com to provide you with real-time data about the prices and market valuations of hundreds of coins. You can view charts showing changes in price, capitalization, hashrate, and fees for both BCH and BTC using the Bitcoin Charts page.
What other sources showing oversold and overbought crypto assets do you know? Tell us in the comments section below.
Disclaimer: Readers should do their own due diligence before taking any actions related to third party companies or any of their affiliates or services. Bitcoin.com is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any third party content, goods or services mentioned in this article.
Bitcoin Is Plagued by an Insidious Flaw – But It’s Not What You Think
By CCN: Bitcoin has a crippling governance problem, but it’s not what you think it is. Technical solutions deftly manage consensus on the world’s most popular cryptocurrency network. But how will we deal with wealth inequality – and the power imbalance that inevitably accompanies it?
To put it bluntly: Wealth inequality will not magically disappear in the new Bitcoin economy.
Technology Made Wealth Inequality Worse – Look at Jeff Bezos
A National Bureau of Economic Research report reveals that wealth is more concentrated in the US today than at any point in the last 100 years. Jeff Bezos, for example, is 30 times richer than the richest man was in the 1980s:
Wealth inequality causes the rich to grow exponentially richer. | Source: Inequality.org
Not surprisingly, 100 years ago also marks a pretty significant time in history. That period was known as the “Roaring Twenties” when unrealistic optimism created a massive stock market bubble, a dramatic collapse, economic depression, and ultimately World War II.
If the emergence of modern-day populism is anything to go by, the similarities between then and now are frighteningly similar.
Wealth Inequality in the Burgeoning Bitcoin Economy
Wealth inequality lurks in the new Bitcoin economy. That’s a problem. | Source: Shutterstock
So what does this have to do with crypto? Well, Satoshi Nakamoto is estimated to be worth around $7.5 billion. The pseudonymous creator(s) of Bitcoin is reported to have somewhere in the region of 1 million Bitcoin (BTC). Owning one out of every 21 bitcoins in existence is a very powerful position to be in, not unlike that of Amazon boss Jeff Bezos.
And that potentially leaves us in the same dilemma we face with the current financial system: “if you got all the money, you’re running things, honey.”
Far be it for me to argue that Satoshi Nakamoto doesn’t deserve it. Anyone who contributes to the greater good of society should be richly rewarded. But the fact remains: the new Bitcoin economy may end up being no different than the traditional one.
New entrepreneurs will rise up and build their wealth. And so they should. But what’s to stop these new crypto-capitalists from becoming crypto-socialists? From monopolizing industries and lobbying the newly wealthy? As an employee in the crypto economy, you may want monetary incentives to be aligned with your own ethics. What’s a humble worker to do?
The short answer is governance. The practical answer is that it’s not that simple, especially in a decentralized movement.
Most discussions on governance ultimately go down the on-chain rabbit hole. But perhaps the bigger issue at hand relates to the off-chain dynamics. With how people will create and use the value they’ve earned. Bitcoin, after all, is just a piece of tech. How will it deal with the thorny ethical issues that governments usually tackle?
5/ The exception to “at a certain size, governance problems arise” may be networks like @decredproject that initially focus on nailing governance.
There are no easy answers, but here are two ideas worth exploring today as we build the cryptocurrency economy of tomorrow.
The Hard Income Cap
The income cap is a controversial idea that suggests all individuals in an economy can earn up to a maximum amount. The cap is arbitrary and should ideally be determined by consensus. For argument’s sake, let’s call it $10 million (or ±1370 BTC if you prefer). Anything earned above this cap will be placed in a community fund.
The network must then vote on how best to distribute those funds, perhaps a “clean the oceans” campaign or a low-cost housing solution for the homeless — the idea being to allow individual achievement without sacrificing the greater good.
Token holders voting for the future direction of the network. | Source: district0x
To achieve a greater sense of crypto-community democracy, you need a voting system that cannot just be bought off. Many cryptocurrencies base consensus on the number of tokens owned. In a world of cheap money and centrally run printing presses, bankers can swoop in and just as easily buy cryptocurrency en masse.
Quadratic voting is an interesting idea that prevents the buying of power by assigning every network participant the same amount of voting credits, say 16. The credits have nothing to do with the actual currency of the network. Using a simple squaring rule, the more votes you commit to a specific issue, the more it costs. So:
1 vote = 1 credit
2 votes = 4 credits
3 votes = 9 credits
4 votes = 16 credits
This way, everybody in the network has the same 16 credits to vote on issues they are passionate about. Want to clean the oceans? Great. Put all 16 credits on it. Prefer to vote on a whole bunch of other issues? No problem. Spend 16 votes on 16 different issues, thereby spreading your support.
These ideas aren’t foolproof and should definitely be challenged for their drawbacks. For one, they rely heavily on identity-based networks which most crypto fans despise. But that doesn’t mean we shouldn’t explore them. Established norms like nation-states or even the internet were once radical ideas in their own right.
Oh cool, someone’s implementing quadratic voting!
That said, this stuff *does* require a unique-identity layer to work well. I think it’s one of the higher-priority layer-2 infrastructure pieces that could be built right now. https://t.co/fK5uG5kK5u
It’s entirely possible that this issue may not be as big as it appears. The worst thing about ICOs might be the best thing for cryptocurrency. While most new coins have been a complete disaster and many just outright scams, the fact is that for the first time in history anyone can create money and put it on the market.
That means that if Bitcoin, or any other cryptocurrency, fails to meet the needs of its users, they will just pivot to the next solution that can. In the old economy, wealth = power. In the new one, we may actually have a more significant shot at real democracy. The answer will lie in divorcing the acquisition of wealth from the accumulation of power.
The king of crypto is still in good shape, but there are still many questions to be answered if we’re going to prevent excessive wealth inequality from forming in the new Bitcoin economy.
Disclaimer: The views expressed in the article are solely those of the author and do not represent those of, nor should they be attributed to, CCN.
The US-China trade war dominates the global stock market outlook because they are the largest economies in the world, as well as two of the most interlinked. However, the Trump administration’s disputes with key allies like Japan also threaten the Dow Jones and other major indices.
The elephant in the room, however, is the auto industry.
Global Stocks Will Recoil if Trump Launches New Offensive in Trade Crusade
Trump knows that struggling US auto-workers form a crucial component of his blue-collar base. Japan, meanwhile, remains a dominant force in global car manufacturing.
If Trump pushes a harder line with Abe, he likely will take on the EU as well. The subsequent fallout could be disastrous for the Dow.
Shinzo Abe will be desperate to avoid further Trump auto tariffs. | Source: Shutterstock
If Trump starts squeezing his allies for a good headline, we could find the world’s four largest economies – the US, China, Japan, and Germany – involved in a multi-dimensional, growth-stifling stand-off.
The outlook for the Dow and other major indices gets even bleaker when you consider that the United Kingdom sits at number five. Ravaged by Brexit, the British now have to decide on a new leader with the risk-negative Boris Johnson currently the betting favorite.
Analysts Break Out the Dreaded ‘R’ Word
The sudden escalation to the US-China trade conflict has already led analysts to break out the dreaded “r” word: recession.
What investment banks remain reluctant to discuss is what would happen if Trump exports his trade war to his friends as well as his foes. In this circumstance, the $600 billion estimated losses from Trump’s current trade war would be chump change.
Dow Jones Forms Dangerous Technical Pattern
The Dow failed to set fresh highs, forming a head and shoulders pattern on the monthly chart. | Source: Yahoo Finance
Further darkening the market’s outlook, the Dow Jones Industrial Average recently formed what looks alarmingly like a head-and-shoulders pattern on the monthly charts.
This tells us that the bulls have been buying the dips, but there aren’t enough buyers to push the index to fresh highs.
If Japan produces a tremendous pro-Trump headline, stocks could rally once more. However, given the current set-up, price spikes are meaningless until the Dow can confirm a new breakout to the upside.
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Tool for Independent traders.
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